- EUR/USD takes offers to reverse late Tuesday’s corrective bounce amid four-day downtrend.
- Bullish chart formation, hawkish ECB clues challenge Euro sellers ahead of Fed Chair Powell’s bi-annual Testimony.
- Clear break of 1.0935-40 could convince EUR/USD bulls to return to the table.
EUR/USD stays on the bear’s radar for the fourth consecutive day as it reverses the late Tuesday’s corrective bounce off the weekly low amid very early Wednesday morning in Europe. In doing so, the Euro pair refreshes the intraday low around 1.0910 while staying within a bullish chart formation called a “bull flag”.
Given the sluggish RSI (14) line, the EUR/USD bears may find it difficult to keep the reins, which in turn highlights the stated flag’s bottom line and a two-week-old rising support trend line, respectively near 1.0885 and 1.0875, as short-term key supports.
Even if the Euro bears conquer the 1.0875 support and defy the bullish chart formation, the 200-Hour Moving Average (HMA) of near 1.0845 will act as the final defense of the EUR/USD bulls.
Meanwhile, EUR/USD pair’s recovery needs validation from the stated flag’s top line, around 1.0935-40 by the press time.
Following that, the monthly high surrounding 1.0970 and the 1.1000 round figure may prod the pair buyers before directing them toward the yearly high of around 1.1100 and the theoretical target of the bullish flag, close to 1.1230.
Apart from the bullish chart formation and the below 50 levels of the RSI (14) line, the cautious mood ahead of speeches from multiple European Central Bank (ECB) and the Federal Reserve (Fed) officials also prods the EUR/USD bears of late. Among them, Fed Chair Jerome Powell’s bi-annual Testimony gains major attention.
Also read: EUR/USD: ECB hawks defend Euro above 1.0900 despite Fed rate hike signals, Powell’s Testimony eyed
EUR/USD: Hourly chart
Trend: Limited downside expected